Decision Making Framework
for Livestock Border Closures

Executive Summary

The Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA),
with cooperation and input from livestock industry representatives
and members of other government organizations, has developed a Decision
Making Framework for Livestock Border Closures. The Framework is
to be implemented in the event that the border between Canada and
the U.S. or another significant trading partner is closed to the
export of livestock and livestock products from Ontario. The Framework
is designed to help maintain infrastructure and contribute to the
sustainability of the pork and beef production and processing sectors
during any disruption to border traffic.

Information gathered in the first phase of the project revealed
that few jurisdictions have devoted extensive effort to developing
a plan to mitigate the impacts of potential border closures on the
livestock production, marketing and processing sectors. Events in
the recent past have shown the enormous impact of border closures
on the viability of the livestock industry in Ontario. The closure
of the U.S. border to Canadian cattle and beef in response to the
discovery of BSE in Alberta cost the Ontario economy an estimated
$945 million. This has led to a real recognition in the province
of the vulnerability of the livestock sector to border closure threats
such as a foreign animal disease outbreak.

The beef and pork industries in Ontario are heavily dependent on
exports of live animals and meat products. Therefore, border closures
to the U.S. or other export markets would severely impact these
sectors and associated industries in Ontario. The decision was made
for OMAFRA to go ahead and lead the development of a plan that could
be used in the event of a border closure. While the main focus was
on the beef and pork sectors, there was recognition that a border
closure would also impact other livestock commodities.

Although border closures are often national in scope, beginning
with the development of a national plan would be complex and the
time frames to achieve a final national plan would not provide the
Ontario livestock industry with a strategy that could be implemented
quickly. The concepts and recommendations in this Framework, while
they are specific to Ontario, could be applied by other provinces
or at the national level.

There are a number of uncertainties around border closures. In
this document the term "border closure" refers to anything
that prevents the export of Ontario livestock or livestock products
to other countries. The closure may be put in place by a single
country or multiple countries. A country may close the border to
goods from other countries for any number of reasons including a
foreign animal disease (FAD), food safety risk, weather disaster,
terrorism etc. The duration of a border closure may be unpredictable,
resulting in market disruption, confusion and planning difficulties
for industry and government. While the length of the closure is
expected to be unpredictable, the options and strategies for dealing
with the impacts must be such that they can help mitigate impacts
as time goes on.

The sectors affected by a border closure can also vary. It could
affect the swine and/or beef sector and, within each sector, the
restrictions could be on live animals and/or meat products. In order
to develop options to assist the production and processing industries,
the worst case scenario was used as the expected situation. Not
all options will work for every border closure scenario. Information
is provided on potential options to allow for informed decision
making when determining the best course of action to deal with the
actual circumstances of the border closure. The appropriate option(s)
to implement cannot be determined until the factors surrounding
the border closure are known and can be looked upon in the context
of the livestock sector(s) involved.

The Framework identifies the provincial and ministry emergency
management structure that will be activated upon notification of
a border closure, identifies the positions, roles and responsibilities
of Ministry Action Support Teams and provides operational details
for managing each of the identified components in the Framework.
Potential options that can be implemented during a border closure
are identified for each key component. The decision to implement
them will depend on the circumstances of the border closure.

Communication throughout the value chain will be critical during
a border closure. Industry participants need to know what is happening,
what caused it and what actions are being taken by governments,
industry leaders and producer organizations. Consumers will need
to be reassured that their food supply is safe. With the loss of
export markets, the affected sectors will be totally reliant on
domestic consumption and cannot afford to have unwarranted concerns
regarding food safety impact the smaller domestic market. The communications
plan is implemented upon notification of the border closure. Initial
actions focus on informing industry stakeholders, identifying a
key spokesperson(s) and implementing communication vehicles (i.e.
conference calls, website, media bulletins, etc.). A key part of
communications will be developing key messages with stakeholders
and managing public concerns regarding food safety and animal welfare.

Maintaining an appropriate level of biosecurity is an ongoing priority
since a disease outbreak at the producer or sector level would only
exacerbate the impacts of the border closure. The communication
of recommended biosecurity measures is the only response action
to be considered upon suspicion or confirmation of a foreign animal
disease. Effective biosecurity measures will be important in the
control and/or eradication of a disease, and subsequent resumption
of exports.

Managing surplus animals will become a priority when the export
markets for animals or product is suddenly shut off. The animal
production chain cannot be turned off quickly. There will be a rapid
development of surplus inventories in the production system that
will need to be addressed on farm by individual producers. For cattle,
modifying feeding programs and management on farm will help delay
the volume going to market, but the pork sector has few options
to reduce the volume of either weaner pigs or market hogs. Options
provided (e.g. extend housing and feeding, delay marketing, etc.)
for the swine sector will gain a bit of time to allow producers
and the industry to react to the situation.

There are no production or marketing controls in the beef or swine
sectors like those that exist in poultry and dairy. With individual
producers making independent marketing decisions, the opportunity
for orderly marketing in these sectors is limited. In addition,
the commodity organizations do not have authorities to control marketing
and neither does the government except in a declared emergency.
The options available are limited and focus on facilitating discussions
with industry stakeholders to manage issues and identify options
to deal with the border closure situation.

The packing sector will feel the impacts of a border closure to
meat products immediately. The loss of markets for their beef and/or
pork products, will result in a reduction in processing or closure
of packing plants until alternate markets are found. This in turn
will reduce the demand and market price for live animals. Packers
that have domestic markets or alternate export markets will continue
operating by adjusting throughput. Maintaining slaughter capacity
is important in managing surplus animals and supporting the market.

While there are a number of storage methods for beef and pork,
storage space will become a limitation very quickly. As time goes
on there may be the need to dispose of surplus animals and meat
products. The methods available to euthanize and dispose of animals
will be communicated to producers. OMAFRA will facilitate industry
discussions to assess and select appropriate options for mass euthanasia
(on-farm and off-farm options have been identified). Communication
strategies will be essential in managing public reaction and maintaining
consumer support for the industry.

Business risk management (BRM) programs are designed to support
the production sector during periods of income fluctuation. During
the BSE crisis industry was critical of BRM programming for being
slow to respond and identified several design issues that prevented
funds from flowing to those with significant needs. In an effort
to respond, the federal and provincial government provided various
levels of ad hoc financial assistance to producers and processors
during the BSE crisis. The latest suite of BRM programs (i.e. AgriInvest,
AgriStability, AgriRecovery) were developed to be more responsive
to producer needs. AgriInvest is a savings account accessible to
producers during periods of low income; AgriStability, similar to
the Canadian Agricultural Income Stabilization Program (CAIS), provides
support to producers for larger declines in farm income; and AgriRecovery,
designed to provide a rapid response to small and medium-sized,
local disaster situations and to fill gaps not covered by existing
government programming. Most livestock border closure situations
would likely be beyond the scope of the AgriRecovery Program, due
to the size and extent of the impact.

The options provided in the Framework to manage surplus animals,
maintain orderly marketing, etc., are designed to achieve specific
objectives, which in the short and long term, act to encourage a
stronger market for livestock and keep products flowing. The options
would be purely voluntary on behalf of the sectors as there are
no legislative authorities in existence to make these actions mandatory.
Providing financial incentives can encourage producers to implement
the identified options.

Programs designed to encourage implementation of the options are
identified in the Framework. Whether any of the programs identified
are implemented would depend on the circumstances (reason, extent,
duration, timing) of the border closure and the ability of the other
BRM programs (AgriInvest, AgriStability) to alleviate the financial
impact of market fluctuations.

While potential programs are identified and described in the Framework,
it should be recognized that there is no commitment by the government
to implement or provide funding assistance. Any requests for assistance
by the production or processing industries would need to be assessed
on a case by case basis at the time.

Financial difficulty and uncertainty can produce high levels of
stress for producers and their families. The Framework identifies
available resources that are to be communicated to producers and
their families to help manage emotional and financial stress as
they deal with the impact of a border closure.

The Decision Making Framework for Livestock Border Closures has
been developed using current information on the industries involved.
It is impossible to predict what situation will exist if there is
a border closure in the future. Regular reviews of the Framework
based on the current structure of the sectors will identify necessary
changes which will be communicated to the parties involved in order
to ensure that this Framework will provide timely guidance if and
when a border closure occurs.

Industry participation in identifying the appropriate options based
on the circumstances of the border closure is essential to achieving
the goal of helping to maintain the infrastructure and contribute
to the sustainability of the beef and pork production and processing
sectors.

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